Beginning in 2021, and continuing through 2024, various local government entities (LGEs) have been given the opportunity to receive funding from the Coronavirus Local Fiscal Recovery Fund. This relief fund was created by the American Rescue Plan Act of 2021 (ARP) in order help local governments mitigate the financial impacts of the COVID-19 pandemic. This funding was intended to help LGEs strengthen COVID-19 response efforts, replace lost revenue, provide stability for residents and local businesses, and ensure the systemic equality of public health resources and economic opportunities.
With such grant funding comes the responsibility to ensure that the LGE is spending the funds appropriately. Local governments that receive relief will need to adhere to the U.S. Department of Treasury’s funding objectives. Implementing proper internal controls over the grant funds is vital, as spending federal monies without such controls puts LGEs at risk of losing or having to return funds to the federal government. The table below illustrates examples of strong internal control policies and procedures that LGEs should consider implementing before spending the grant funds: